DLF Q1 profit falls by 58% to Rs 109 crore YoY

Total income of the company, however, increased by 9% to Rs 2,211.24 crore in the April to June quarter this year, compared with Rs 2,025.58 crore in the same period last yearSanu Sandilya | ETRealty | Updated: August 12, 2017, 20:14 IST

NEW DELHI: Realty firm DLF on Saturday reported a 58.37% drop in consolidated net profit at Rs 109.01 crore in the quarter ended June 30, 2017, against Rs 261.85 crore profit in the same period last year.

Total income of the company, however, increased by 9% to Rs 2,211.24 crore in the April to June quarter this year, compared with Rs 2,025.58 crore in the same period last year.

The company achieved gross sales of Rs 110 crore during the June quarter, while it leased 0.20 million sq ft of office space during the quarter, according to a BSE filing today.

The demand for residential real estate continues to be soft for the company despite growth in the economy and the implementation of the real estate regulatory Act (RERA) and goods and services tax (GST) has continued to elongate the sales cycle.

The company expects that sector would achieve normalcy over next 2-3 quarters.

"With reduction in benchmark interest rate by RBI this month and markets guiding towards further softness in interest rate, the sector should witness a recovery soon. The Company shall have a healthy pipeline of finished inventory for sale in foreseeable future when the demand returns," it said.

The demand for office leasing space continues to be good for the company. According to the company, development of two new towers in Chennai SEZ is expected to be completed in FY18 while development of Cyber Park, Gurgaon is expected to be completed in FY19.

DLF also informed that the transaction for sale of compulsorily convertible preference shares (CCPS) in its rental arm DLF Cyber City Developers (DCCDL) is in advanced stages of discussion. DLF is in the process to sell a 40% stake of promoters in DCCL to Singapore sovereign wealth firm GIC.

The company has 19 million sq ft of projects under construction at the end of the April to June quarter.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.